Business - Written by on Wednesday, October 31, 2007 8:40 - 0 Comments

Denis Hancock
The Cisco challenge and winner take all societies

I have vague recollections of contests and challenges during my undergraduate business school classes (and yes, all my recollections of that time are now a little vague): I’d either join up or get set up with some other students, we’d “invent” a product to market like Ginseng Berry Juice Bombs (or a new service, or solve a “pressing” problem for a company, etc.), we’d submit a report for judging, if we were really lucky we’d get a decent mark, some sort of novelty hat or t-shirt, and head back to the pub to celebrate. Er, I mean head to the pub to celebrate.

Now everyone has different priorities, but I can’t help but feel that the prize Cisco is offering in their new “business and technology idea” contest might draw a little more attention then free t-shirts: the I-Prize will include $10 M in funding over 3 years to get an idea actually started, along with a $250,000 signing bonus. Other guidelines for the contest:

  • judges are looking for an idea that can generate $1 B+ over 5-7 years
  • criteria used to select idea will be similar to internal processes Cisco uses
  • no Cisco employees, or family of employees, are allowed
  • a 10% referral fee and a novelty t-shirt of some sort should be sent to Denis Hancock, care of New Paradigm Blog, post haste.

While this sounds kind of interesting, to be totally honest I’m finding that the contests popping up all over the place quite boring, and they are becoming very hard to call innovative anymore. After all, most boil down to (with acknowledgement that Cisco’s is better than most):

Hey! Do you have an idea that could make us millions or billions of dollars? If so, we’ll let you work on it for a long time, and then bring it to us in competition with a whole bunch of other ideas, so long as you sign a waiver saying you have very few rights, and if we like your idea, and decide that it’s different enough from other ideas we’ve been generating internally, we’ll give you a relatively small pile of money! Everyone we don’t select will be like a free R&D lab that costs us nothing – think how great are margins will be!”

Moreover, tied to the “quote” above, I’m not so sure that these contests are as great for stimulating innovation as many people may think. As people far smarter than I have postulated before, failure breeds success – in order to encourage and stimulate truly ground breaking innovations, you need to give people space to make mistakes.

In a model where hundreds or thousands of people do a lot of work, and only one or two of them get paid, there’s a natural problem built it – it doesn’t scale well when thee who fails, fails to eat. You rarely hear this issue discussed in relation to the contests, but it’s something to think about as contests become more pervasive. At the same time, that person who won should generally stop and think about whether they’re getting full value for their idea or not – because the answer is generally not.

Even better, if you want to do some interesting reading on this subject, I recommend The Winner Take All Society, a book which delves into some of the issues and concerns tied to the contest model quite nicely.



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